Hiring Challenges and the Education and Childcare Industry
The education and childcare industry continues to face disruptions, despite the economy’s resilience in dealing with inflation, supply chain issues, and labor challenges over the last year. Even with the benefits of a low unemployment rate, such as increased job prospects and wage hikes, business owners face obstacles in finding and retaining talented workers in a tight labor market. Rebounding from pandemic disruptions, the education and childcare industry, a $60 billion market, continues to face hiring challenges. As the demand for childcare services grows alongside return to office mandates, business owners in the industry face the challenge of growing their business in a highly competitive labor market.
Education and Childcare Industry Labor Issues
Education and childcare businesses play a vital role in the U.S. economy. Not only do these businesses support children's educational needs, but they also allow parents to actively participate in the workforce. From structured care facilities to private schools and specialized services like test preparation, camps, and professional development programs, the education and childcare sector offers a wide range of options.
According to BizBuySell’s most recent Insight Report, which tracks the health of the U.S. small business economy, business owners are seeing little to no progress in the labor market. With nearly 50% of owners sharing that the labor market is not improving, and over 20% unsure, finding qualified employees remains challenging. Despite the high demand for childcare workers, the industry is experiencing a slow recovery. The education and childcare sector lost 370,000 jobs amid the COVID-19 pandemic lockdowns, and the industry is still down nearly 40,000 workers.
Labor Shortages and the Impact on Business Valuation
With the unemployment rate changing little this fall, business owners in the education and childcare sector continue to face labor shortages with no significant relief. With nearly half of business owners reporting to BizBuySell that their business is not at full staff, the search for qualified and licensed childcare and education providers remains a priority. Whether a business owner is looking for growth or preparing to sell their business, an important factor that adds value is the ability to retain employees and the positive impact key employees have on continuity and performance. When valuing a business for sale, the experience, industry knowledge, and customer relationships of the employees play an important role.
The difficulties in finding qualified hires in the education and childcare industry can impact the overall value of businesses. As the industry strives to recover from the setbacks of the COVID-19 pandemic, the shortage of qualified employees remains an obstacle. Navigating the complexities of the current labor market is not just a necessity for daily operations; it is essential to ensure the resilience and long-term success of businesses within the education and childcare sector.
For more, visit our industry guide to discover in-depth information tailored to owners in the education and childcare industry to learn about business valuation and strategies selling a business.